Neighbourhood inequality spillover effects of gentrification

Previous research has considered how gentrification may alter the racial composition, income composition and income segregation within a neighbourhood. An increase in income segregation at the neighbourhood level may be evidenced by a reduction in income inequality, which may harm low-income households. We examine how the influence of gentrification, with respect to changes in income inequality at the neighbourhood level over time, may spill over into surrounding neighbourhoods as lower-income households' location choices change. We use data from the 30 largest Core Based Statistical Areas in the US from 2000-2010 and find that areas bordering newly gentrified neighbourhoods experience an increase in income inequality (potentially benefiting low-income households). This effect appears to be concentrated in relatively smaller CBSAs, where lower-income households may have less mobility, and in surrounding neighbourhoods that are themselves relatively lower-income.